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Roger Gitlin: How much is a trillion?

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Posted: February 10, 2009 1:04 a.m.
Updated: February 10, 2009 4:55 a.m.

Roger Gitlin

 
As the Senate signs off on its version of the stimulus package of almost $1 trillion ($780 billion Senate version, $820 billion House version), who could disagree that the United States of America has moved dramatically to the left?

The Obama administration's economic recovery act of 2009 is, in the words of the 44th president, "bold and decisive." It's also socialism.

The word "trillion" is being bandied about in an almost marginal, if not cavalier way; I thought I would put the word "trillion" in perspective.

One million seconds = 12 days.

One billion seconds = 32 years.

One trillion seconds = 32,000 years (that's 30,000 years before Jesus Christ).

Six trillion miles (5.86 to be exact) = 1 light year (186,000 miles per second).

The national debt as of Monday is officially listed at $10,729,244,211,545.46; if you actually said that number it would take you eight seconds to pronounce it.

Your share as one of 305 million Americans is about $37,000. Repayment of only the interest on the debt is about $240 billion annually, 9 percent of the budget, just behind national defense as the largest outlay of revenue.

Staggering!

The Obama administration, in the spirit of bipartisanship, pulled out its White House sniper rifle and picked off two Republicans (Susan Collins of Maine and Arlen Specter of Pennsylvania), along with conservative Democrat Ben Nelson of Nebraska, and has the necessary 60 votes to pass this near-trillion-dollar spending bill.

Astounding!

Please do not misunderstand me. I believe economic help is drastically needed for those in dire straits.

However, a bill with 42 percent tax cuts and 58 percent spending is not the answer.

But apparently, it's done ... and we are moving forward (or rather backward).

What will be the effect of this monstrous spending plan about to be effectuated?

Will it help those in need? Or is the pork in this bill going to be so costly, it may take us down as a country?

I want to place the word "hyperinflation" into your cerebrum. Hyperinflation is a massive and rapid increase in the amount of money that is not supported by growth in the output of goods or services.

There is no question that this spending bill passed by Congress and signed by the president will manifest itself in the devaluation of our currency (inflation).

Whether the condition rises to the level of hyperinflation remains to be seen, but there is ample evidence that this historically massive amount of government paper currency (also called fiat money), will cause massive inflation down the road.

Hyperinflation has affected many economies around the globe. After World War I, the vanquished Weimar Republic of Germany was delivered a $19 billion bill courtesy of the Allies at the Treaty of Versailles.

How did Germany pay this huge debt? Germany started rolling the currency presses, promptly paid off the debt, and in short order the Germany mark was virtually worthless.

By late 1923, the Weimar Republic was issuing fifty-million-dollar mark notes and postage stamps that carried a face value of fifty billion German marks.

Hyperinflation has been seen in the United States rarely, but it did make appearances during the Revolutionary War and the Civil War, especially on the Confederate side.

People then wanted to be paid in gold or silver.

Latin American and African counties are frequently hit with hyperinflation. Would you want to conduct your daily business in Mexican pesos?

Government bailouts of the financial system, similar to the wildly chaotic bailout passed by Congress in October 2008 and quickly signed by President Bush, work to destroy the dollar, the Euro and the British sterling because of hyperinflation.

Martin Henneck of Tych Group states, "The infusion of government money into the banks is the first step down the road to hyperinflation." Hennecke goes on to say, "gold will continue to surge as the government places more and more valueless paper currency into the market place."

How can you protect yourself if this condition eventuates?

Consider purchasing gold, silver, or platinum. Also think about purchasing real estate, which has historically been an excellent hedge against inflation. There has never been a better time to buy real estate than right now.

The national debt is a moving number; in the 15 minutes you have spent reading my commentary, it has grown $35 million.

Roger Gitlin is a Santa Clarita resident, a teacher and a Minuteman. His column reflects his own views and not necessarily those of The Signal.

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